Philam Life ready for PPP

Manila, Philippines -  The Philippine American Life and General Insurance Co. (Philam Life) said it is prepared to invest in the Public-Private Partnership (PPP) initiative of the Aquino administration.

Philam Life president and chief executive officer Rex A. Mendoza said the company Philam Life has always been involved in activities leading to increased national savings and nation building.

“We are interested in the PPP, but as an investor (and not a project proponent),” Mendoza said in a press briefing yesterday.

He added: “We are prepared to be part of any group or consortium that will help finance or invest in any major project.”

Philam Life has made major investments in projects that have shown an ability to contribute to nation-building or for the development of the country’s capital markets.

It is the only insurance company that made investments in the country’s only fixed-income exchange now known as the Philippine Dealing and Exchange Corp. (PDEX).

It was also involved in the Skyway, the Manila-Cavite Expressway and the South Luzon Expressway.

But the other more compelling reason for the country’s largest insurance company is that due to the prevailing low interest rate environment, insurers need to lend out as part of its investment portfolio.

The other alternative for insurers is to increase premium rates of its insurance policies to cope with low earnings, since a huge part of their portfolio come from fixed income instruments, including government securities.

Mendoza said that Philam Life refrained from any premium rate increase to protect their policyholders and the market.

“In fact, some of our products were withdrawn from the market as it required high returns in investments. In turn, we introduced the more popular and affordable investment-linked products,” the Philam Life chief executive said.

Meanwhile, Philam Life would be transferring its head office to the Bonifacio Global City next year, and the AIA Group pledged its full support for its subsidiary.

AIA Group chief executive and president Mark Edward Tucker said Philam Life is one of its best performing subsidiaries and that it would get all the financial and technical support.

“The AIA will give whatever support Philam Life needs,” Tucker said, who is in Manila to lead the 65th anniversary of Philam Life.

“All our business has been and will continue to be focused on Asia, wherein we relocated in 15 major markets,” he added.

AIA is the world’s fifth largest insurance company and considered among the most profitable. AIA used to be identified with the American International Group (AIG) until the latter got into financial bankruptcy.

Last year, Philam Life reported total premium income of P13.357 billion, up 19.25 percent from P11.2 billion reported in 2010. In 2009, total premium income was placed at P10.8 billion.